Private Construction Decreased by 46% Due to Real Estate Market Downturn

Ministry of Land's Q3 Construction Contract Amount
Down 38.8% Year-on-Year... Fourth Consecutive Quarter

Due to the real estate market downturn and rising construction costs, the contract amount for private construction projects in the third quarter of this year decreased by 46% compared to last year.

On the 17th, the Dunchon Jugong construction site as seen from Lotte World Tower Seoul Sky in Songpa-gu, Seoul. Photo by Jinhyung Kang aymsdream@

On the 24th, the Ministry of Land, Infrastructure and Transport announced that the construction contract amount for the third quarter of 2023 was 45.5 trillion won, a 38.8% decrease compared to the same period last year. This marks the fourth consecutive quarter of decline.

Private construction projects amounted to 34.4 trillion won, down 46.1%. This is significantly lower compared to 40 trillion won in the second quarter of this year, continuing the four-quarter downward trend.

Public construction projects (public sector), ordered by the national or local governments and public institutions, recorded 11.1 trillion won, an increase of 5.2%, influenced by land development and school construction projects.

Due to a decrease in industrial facilities, the contract amount for civil engineering (including industrial facilities and landscaping) projects was 11.7 trillion won, down 21.6% compared to the same period last year. With reductions in residential buildings and factory workplaces, architectural projects amounted to 33.8 trillion won, a 43.1% decrease.

As the construction market cooled in the third quarter, major construction companies also suffered significant impacts. The contract amount for the top 1 to 50 construction companies was 18.2 trillion won, a 50.8% decrease compared to 37.1 trillion won in the third quarter of last year.

Companies ranked 50 to 100 recorded 2 trillion won, down 35.5% from 3.1 trillion won in the third quarter of last year. Companies ranked 101 to 300 saw a 29.3% decrease to 4.5 trillion won compared to 6.4 trillion won in the same period last year.

By construction site location, the contract amount in the metropolitan area was 20.4 trillion won, down 43.1% compared to the third quarter of last year. In Gyeonggi Province, it was 13 trillion won, about half of 25.1 trillion won in the third quarter of last year. Non-metropolitan areas decreased by 34.8% to 25.1 trillion won.